Which crypto can explode in 2022?

Highlights

• Altcoins are now achieving the same status as Bitcoin in the world of crypto investment
• Large cap cryptocurrencies may provide positive returns during 2022, but they may not be the best performers
• The likely contender that may explode in 2022 is a meme currency

 

The year 2022 may not be the year of biggies. There is something about an emerging market that many often neglect. Social media was one emerging market in the 2000s. Today, the sector is dominated by Facebook, a top ten asset in the world by market cap. Facebook wasn’t the first social media platform, but it added a few advanced features and became a top tech giant.

Bitcoin was the blockchain-based currency that single-handedly paved the way for a brand-new class of investable assets. But first movers may not always be the best performers in the long-term. In 2022, is there one crypto that will explode to give its backers jaw-dropping returns? Though cryptos are hyper-volatile with respect to price, let’s find out the likely contender.

Also read: The top crypto gainers of 2021, and a couple of underperformers

Bitcoin? Maybe not

As stated earlier, Bitcoin was the biggest dominating player in cryptos for long, but it may have reached a saturation point.

There are multiple reasons behind this. First, 2021 was a year-like-never-before for Bitcoin. In Canada, the world’s first Bitcoin exchange traded fund (ETF) was approved by the regulator. This was no mean feat for a blockchain-based independent currency that hasn’t been able to impress central banks. This was followed by new indices tracking Bitcoin prices, and then big US banks starting crypto services for their clients to prevent the flight of dollars to crypto exchanges like Coinbase

In just four months, Bitcoin doubled its market cap in 2021. The latter half of the year was dominated by news of El Salvador making it a legal tender, and concerns around high electricity consumption. By the end of 2021, Bitcoin couldn’t help but struggle with extreme price volatility.

Maybe, crypto investors were looking for newer versions of blockchain-based assets like Ether and non-fungible tokens (NFTs). This also reflects in Bitcoin losing its dominance in total market cap of cryptos by the end of 2021.

Image description: Bitcoin dominance in cryptocurrencies

Data provided by CoinMarketCap.co

Ether? Not yet

Ethereum’s token Ether was a better performer than Bitcoin in 2020 as well as 2021.

Like BTC, Ether too has lost in the first week of 2022. But Ether may still be a preferred choice for a section of crypto investors. This section is looking at how Ethereum’s blockchain is playing a key role in the distributed ledger ecosystem.

NFTs and blockchain gaming are the emerging sub-sectors within cryptos, and neither of the two could have become so popular had it not been for Ethereum. ERC-20 and ERC721 are nothing but new coins and NFTs respectively. Many decentralized finance (DeFi) platforms, which allow yield farming, also use Ethereum’s services. There is a long list of native tokens that exist on Ethereum’s blockchain.

But like Bitcoin, Ethereum may also end up as the first mover, but not the most dominating one in the long-term. Solana, Cardano and many other new blockchain networks, which promise low gas fee and high processing speed, are attracting developers. That said, Ether may gain in the coming years, but it might not ‘explode’, something that get-rich-quick crypto investors want from their asset.

Also read: Cryptocurrencies vs. stock market: What can be the best pick for 2022?

NFTs and blockchain gaming? The craze may have stagnated

Here, investors must differentiate between cryptos and other digital assets. Bitcoin vs. NFTs is the new debate, but the truth is these two have little in common except blockchain underpinning.

Bitcoin and all other altcoins are fungible tokens, which means any one unit of a specific crypto has the same value as other units. NFTs are unique. No single NFT can be exactly similar to the other. Take for example, NFTs of Beeple or CryptoPunks. Each of their digital artwork, and that of Bored Apes, has no relation with other artworks within the same project. NFTs roared to new heights in 2021, but there is a wide concern that the prices might be unjustifiably high.

Blockchain games could have become the cryptos to explode in 2022, but it seems like they are unable to maintain the momentum. After Facebook announced its metaverse move, tokens like Axie Infinity, Decentraland, and The Sandbox gained value. It was because many are equating blockchain games with metaverse. But so far in 2022, they have lost value.

This doesn’t essentially mean that no NFT would sell for millions of dollars in 2022. There is a craze for digital collectibles, but the crypto likely to explode is the one mentioned below.

Also read: Why are people buying virtual real estate? Should you too?

Shiba Inu? Hopeful!

Though a few commentators might reject Shiba Inu as a meme currency, it cannot be likened to meme stocks like GameStop, which are trading on Reddit sentiments alone.

There are reports that Shiba Inu might soon come up with its blockchain, Shibarium. It is estimated that a single transaction on Ethereum’s network cost nearly US$9. Shiba Inu also uses Ethereum’s services, and the introduction of an independent blockchain may add to SHIB’s appeal. Besides, Shiba Inu may also bring a stablecoin, which may pit it against Tether.

Image description: SHIB price movement in 2021

Data provided by CoinMarketCap.com

Shiba Inu may be discarded as a joke by traditional investors, but new features may add value. SHIB token is also said to be finding use in tipping on platforms like Reddit.

But the biggest factor that could add to Shiba Inu’s appeal is its ultra-low price per token. Despite being in top 15 cryptos by market cap, SHIB token has the lowest price. It currently trades at US$0.000029, with a market cap of over US$16 billion.

Also read: How Bitcoin compares with the US dollar

Viewpoint

There can be no exact answer to ‘which crypto will explode in 2022’. In the first half of 2021, no one had the clue that Axie Infinity would become one of the top performers of the year. Shiba Inu is a likely contender for its ultra-low price per token. Besides, Elon Musk, the world’s richest man, drops enough hints about his liking for meme currencies including SHIB. In 2022, it may be SHIB again, repeating the same popularity record of 2021, with high returns for its backers.